The Snap IPO has been called both a disaster and big success by different commentators, so which was it? IPOs with big positive price movements ("pops") carry both positive and negative implications for the company.

On the negative side, if you purely focus on the mechanics of the IPO they reveal that Snap was underpaid for the stock it sold. If they had used an auction format (like Google did , see How was Google's IPO unique?) they probably would have received a much fairer price, potentially up to as much as $1.1B more. Instead this money went to the big investment banks' favorite clients who made >50% on their money and will later repay it to the investment banks in the form of fees and future business. This is how the current Wall Street ecosystem works, and it's a mechanic that fundamentally screws over IPO-ing companies.

On the positive side, if you zoom out from the the IPO itself, the company had an amazing day. Investors, employees and the company itself ended up being worth >50% than what the expectation was before Thursday - as set by Snap and its underwriters. This both implies that the market is incredibly bullish on the company (which is good news by itself) and that employees and investors are likely to make much more than they thought they would when their lockup period is over (though that's not guaranteed as there's plenty of time for the stock price to drop).

So ironically, while the company handed over a billion dollars of value to a bunch of ultra high net worth individuals and mutual funds, its employees, executives and investors are probably extremely happy about how yesterday turned out. This dynamic is probably part of the reason why the American IPO mechanic continues to disadvantage IPO-ing companies - shareholders are most exuberant when their companies are getting screwed over the most.

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